July 24, 2013

Delaware Supreme Court Weighs in on Accountant Expertise for Earnouts

John Grossbauer of Potter Anderson notes: Last week, the Delaware Supreme Court affirmed the decision of the Court of Chancery in Viacom v. Winshall. That decision confirmed a decision by BDO LLP as Resolution Accountants concerning earn-out payments from Viacom arising from the sale of Harmonix Music Systems. The Court broadly construed the authority of the accountants acting as arbitrators to determine the scope of matters the accountants were to resolve. The decision emphasizes the finality of post-closing accounting determinations and the care that must be taken in drafting and following them.